Friday, October 28, 2011

The following post from the Wall Street Journal did not get much attention due to attention being focused on the record breaking rally in stocks following the agreement that may temporarily move the European debt crisis off the front page for a while:

"The Treasury Department’s auction of seven-year notes this afternoon fared miserably compared to the 2-year and 5-year sales earlier this week.

With investors cheering the eurozone debt deal, there’s been a broad selloff in safe-haven bonds all day, and the sloppy seven-year auction pushed bond prices to fresh session lows.

The 7-year notes were sold at a yield of 1.791%, higher than 1.759% traded right before the sale.

Overall demand, as reflected in the bid to cover ratio, was 2.59, the smallest since May 2009, compared to 2.75 from the previous four sales.

A gauge of foreign demand, the indirect bid was 33.9%, compared to 41.3% from the past four auctions."

While it is way to soon to sound the panic button, rising rates for U.S. debt will someday become a vicious circle. As the U.S. has to pay higher rates to fund the debt, the debt increases faster, and rates go up in a continuing cycle.

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The U.S. economy is headed for a train wreck if we continue to run up trillion dollar deficits and pump millions of tons of CO2 into the atmosphere. The dual problems of the growing national debt and carbon emissions threaten the future sustainability of the U.S. economy.

Americans are by nature optimistic, but if we continue to keep our head in the sand in regard to these issues and continue on a business as usual path, the result will be an economic calamity.

The goal of this blog is to sound the alarm and suggest solutions before it is to late to save the U.S. economy from a bleak economic future.

This blog also reports on investment tactics that some traders are utilizing to provide protection in the event that we fail to turn things around and economic downturn spirals into a depression. However, the blog content is for informational purposes only and does not constitute financial advice. Author Randy Pickard is not a licensed financial professional.